Lumentum (LITE) Bank of America 2026 Global Technology Conference summary

Operational and technical priorities

• Focus on maximizing fab efficiency with experienced teams, advanced tools, and automation.

• Ramping assembly and test operations for complex products, shifting legacy products to contract manufacturers.

• Managing supply chain constraints due to surging AI demand for components like PCBs, lasers, and DSPs.

Market dynamics and supply-demand outlook

• Current supply-demand imbalance for EML lasers is expected to persist through the scale-out phase, with a major optical scale-up and 3x intensity increase anticipated by 2028.

• Focus remains on ramping internal capacity rather than concerns about new competitors.

• Not all lasers are created equal; higher module yields and advanced features drive pricing power.

• Market is shifting from a deflationary environment to one with structural pricing power and opportunities for premium pricing during supply shortages.

Technology evolution and customer adoption

• CPO (Co-Packaged Optics) adoption is on schedule, driven by the need for higher bandwidth and lower power in AI hardware, with a major inflection expected in 2028.

• NPO (Near Package Optics) is viewed as a temporary, intermediate step before broader CPO adoption.

• Hyperscalers are taking varied approaches: some favor pluggables, others NPO or merchant CPO solutions, but convergence toward CPO is expected post-2028.

• Good visibility into customer roadmaps and long-term agreements supports aggressive capacity expansion.